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5 Retailers in the Hottest Selling Season

Sejuti Banerjea

With the excitement of a trade deal dissipating into the anticlimax of a non-exceptional “Part 1,” markets are limping back to normal.

In this environment, it’s clear that there will be some reduction in the $400 billion+ trade deficit in 2017 before the trade war began, when China bought $130 billion in U.S. goods and $56 billion in services. China is now promising $200 billion in U.S. goods and services purchases, mainly agricultural (set to increase from $24 billion to $40 billion annually on average) and energy.

China also promised to stay away from currency manipulation and improve intellectual property protection.

The most significant for retail was, however, the U.S. government’s cancellation of tariffs on nearly $160 billion worth of Chinese goods, including cell phones, laptop computers, toys and clothing and the Chinese government’s cancellation of its retaliatory tariffs that would have included a 25% tariff on America-made automobiles. The U.S. also agreed to lower tariffs on $120 billion of Chinese goods from 15% to 7.5%. This should help retailer sales and push share prices.  

So here are a few retail socks with good potential-

PC Connection, Inc. CNXN

PC Connection is a direct marketer of brand-name personal computers and related peripherals, software, and networking products to business, education, government and consumer end users located primarily in the United States.

Zacks Rank #1 (Strong Buy)

VGM Score A

Retail - Computer Hardware Industry: top 4% of 250+ industries

Expected revenue growth of 5.1% and EPS growth of 28.7% over 2018

2019 EPS estimate up 32 cents (11.7%) in the last 60 days

Last EPS surprise 55.2%, last four-quarter average EPS surprise 28.4%

 

Sonic Automotive, Inc. SAH

Sonic Automotive is one of the leading automotive retailers in the United States. Apart from selling new and used cars and light trucks, the company offers warranties, service contracts, vehicle financing and insurance. It also provides maintenance and repair services, and sells replacement parts and aftermarket automotive products.

Zacks Rank #1

VGM Score A

Automotive - Retail and Whole Sales Industry: top 4% of 250+ industries

Expected revenue growth of 5.3% and EPS growth of 43.5% over 2018

2019 EPS estimate up 19 cents (8.1%) in the last 60 days

Last EPS surprise 15.8%, last four-quarter average EPS surprise 31.6%

 

Lithia Motors, Inc. LAD

Lithia Motors is one of the leading automotive retailers of new and used vehicles, and related tailored services through its nationwide network in the United States. As of Dec 31, 2018, the company offered 28 vehicle brands across 181 stores in 18 states of the United States through its websites Lithia.com and DCHauto.com. The core brands offered by Lithia Motors include Chrysler, General Motors, Toyota, Subaru, Honda, Acura, Ford, BMW, MINI, Nissan and Hyundai.

Zacks Rank #1

VGM Score A

Automotive - Retail and Whole Sales Industry: top 4% of 250+ industries

Expected revenue growth of 6.7% and EPS growth of 18.3% over 2018

2019 EPS estimate up 51 cents (4.5%) in the last 60 days

Last EPS surprise 8.0%, last four-quarter average EPS surprise 7.6%

 

Genesco Inc. GCO

Genesco is a Nashville-based specialty retailer, selling footwear, headwear and accessories through retail stores and Internet websites in the United States and Canada. Its brand names include Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy, Underground Station, Hatworld, Lids, Hat Shack, Hat Zone, Head Quarters and Cap Connection. It also sells footwear at wholesale under its Johnston & Murphy brand and under the licensed Dockers brand.

Zacks Rank #1

VGM Score A

Retail - Apparel and Shoes Industry: top 14% of 250+ industries

Expected revenue growth of -18.0% and EPS growth of 29.6% over 2018

2019 EPS estimate up 24 cents (6.0%) in the last 60 days

Last EPS surprise 20.9%, last four-quarter average EPS surprise 335.2%

 

Zumiez Inc. ZUMZ

Zumiez is a specialty retailer of apparel, footwear and accessories and also sells snowboards, skateboards, bindings and other equipment primarily for youngsters. The popular names associated with the company are Zumiez, Fast Times and Blue Tomato. Notably, Zumiez had acquired Blue Tomato and Fast Times in 2012 and 2016, respectively.  Zumiez also operates through ecommerce platforms, zumiez.com, zumiez.ca, blue-tomato.com and fasttimes.com.au.

Zacks Rank #1

VGM Score A

Retail - Apparel and Shoes Industry: top 14% of 250+ industries

Expected revenue growth of 4.6% and EPS growth of 36.3% over 2019

2020 EPS estimate up 28 cents (13.0%) in the last 60 days

Last EPS surprise 27.1%, last four-quarter average EPS surprise 64.1%

 

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Sonic Automotive, Inc. (SAH) : Free Stock Analysis Report
 
Lithia Motors, Inc. (LAD) : Free Stock Analysis Report
 
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